The Premier League champions are closing in on a deal for the Brazil striker this month following fresh talks with his representatives.

A Chelsea source has told Football Insider that terms have been agreed in principle between Pato and the Londoners after he was given permission by his club Corinthians to negotiate a transfer.

Chelsea will now step up talks with the Brazilian outfit about a transfer fee for the 26-year-old, who is rated in the £8-10million bracket by Corinthians.

The Premier League giants may prefer to agree a loan with an option to buy in the summer, which would give the club the opportunity to assess Pato for the rest of the season.

Pato has just completed a relatively productive two-year loan spell at Sao Paolo but has fallen out of favour at his parent club, partly due to fitness issues.

Both parties are keen on a transfer to take place and Pato is said to be intent upon moving to the Premier League. He rejected a lucrative offer from the Chinese Second Division side, Tianjin Quanjian, earlier this month and his agents instead made known the player’s availability to a number of English clubs.

Pato would require a work permit, and has not played competitive football since November so will lack the required match fitness to step straight into the first-team.

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Nevertheless, the forward has considerable pedigree. He has slipped down the pecking order for the Brazil national team but has a creditable record of 10 goals in 28 matches for his country, as well as 63 in 150 matches for AC Milan, where he spent five-and-a-half years.

Chelsea are keen provide forward back-up to Diego Costa as they attempt to salvage something from a wretched season. They have made enquiries for Sadio Berahino and Jamie Vardy but are not hopeful of signing either of them.

Costa is the undisputed first choice at Stamford Bridge, but, the only other options Radamel Falcao, who is out until March with a thigh injury, and Loic Remy have scored just four goals between them this season.